UK jobs market strengthens but IR35 looms
UK companies took on permanent workers at a solid rate in February, survey data has shown, even as temporary billings fell ahead of upcoming IR35 legislation changes.
The UK jobs market performed well in 2019 despite business investment and trade suffering under the weight of Brexit uncertainty. There were some signs it was beginning to weaken towards the end of the year, however.
This slight jobs slowdown appears to have ended, however, with total demand for staff expanding at the quickest rate for over a year in February, the KMPG/REC jobs report said today. Survey respondents linked the demand to improved market confidence in the wake of December’s General Election.
Nonetheless, the number of people taking temporary billings fell for the second month running, however. Respondents often blamed the upcoming private sector rollout of IR35.
IR35 is a change to Britain’s tax laws that will clamp down on avoidance by targeting contractors for companies who are in practice providing the same service as employees. The change is likely to make more people move to permanent roles, rather than temporary contracting jobs.
James Stewart, vice chair at KPMG, said: “The upturn in the UK jobs market remains steady, evidenced by a further rise in the number of people placed into permanent job roles and at the quickest rate in 14 months.”
Neil Carberry, chief executive of the REC, the Recruitment & Employment Confederation, said: “Businesses are feeling positive, placement numbers are up, and the number of vacancies is now rising at the quickest pace for over a year.”
Yet he said that, ahead of IR35 changes, “we’re hearing about more and more companies putting a blanket ban on hiring contractors – and we now see this influencing the availability of flexible workers too”.